Denver's skies friendlier as United expands

Out of space: One of the major challenges we face is getting airplanes out of the airport," says United Airlines' Kevin Knight. "That means runways."

With 450 departures a day from O'Hare International Airport and its corporate headquarters just a few blocks away from the terminals, United Airlines might be said to have a major investment in Chicago's aviation system. But when it comes to growing its mid-continent hubs, United's rising star is located a thousand miles away from its hometown, in Denver.

United has added dozens of flights at Denver International Airport since 1995, while its O'Hare operations and passenger flow have barely edged up.

"Our ability to grow (O'Hare) has been limited," says Kevin Knight, United's vice-president in charge of route development, blaming a shortage of gates that will be only partially alleviated by O'Hare's pending expansion, about-to-expire federal slot rules and a shortage of runways that shows no sign of easing.

"One of the major challenges we face is getting airplanes out of the airport," he say. "That means runways."

The carrier's pending acquisition of US Airways Group Inc., with its coveted East Coast routes that will provide a lucrative feed for long-haul domestic and international flights, will enable United to grow faster than before. But with O'Hare's current constraints, it's possible that Chicago won't reap the benefits of a larger, more powerful United.

The numbers tell a simple story.

At the 6-year-old Denver International, where United and its United Express feeder line are dominant, operations have been rising about 4% a year for the past five years — about the same as in other airlines' mid-America hubs, such as Detroit, according to Mr. Knight. Much of that service is provided by increasingly popular regional jets, which carry fewer passengers but require almost as much runway space as large aircraft.

But at O'Hare, United's operations and enplanements — the number of passengers boarding planes — are up just 1%, Mr. Knight says.

Since United still wants to grow its high-margin international business in Chicago and to serve as many local residents as possible on their domestic trips, something has had to give. The something is connecting hub service, in which out-of-towners fly here to get a flight to a third city. That service has begun to head elsewhere.

"The percentage of our passengers that are local in Chicago has been increasing," Mr. Knight says, jumping from 38% in 1994 to 44% in 1999. That means connecting passengers are down, to 56% from 62%.

"While we continue to serve the local Chicago market very effectively, we are increasing local service at the expense of connections," Mr. Knight concedes. "Some of that traffic that could go to Chicago is going elsewhere."

Mr. Knight doesn't identify any particular flight or city that's vanished from United's service roster. He insists that United's recent decision to drop non-stop service from Chicago to Honolulu — O'Hare passengers now have to change planes in Los Angeles or San Francisco en route to Waikiki, just like the folks from Des Moines — was based on other factors.

But there are big smiles in Denver, where the total number of passengers leapt 21% to an estimated 39.2 million last year from 32.3 million in 1996, far surpassing Chicago's modest 5% increase to an estimated 72.4 million in the same period.

United already has added 50 flights a day in Denver since the city's old Stapleton Airport closed in early 1995, and United Express service is up 25% in three years. The airline has agreed to lease 10 more gates in Denver — more than the eight additional spots it will get under O'Hare's pending World Gateway expansion — and announced last June that it's building a $100-million, 36-gate regional concourse there.

"They are growing here. We like that," says Amy Bourgeron, Denver's deputy manager of aviation. "We have competitive advantages over other airports that have congestion and traffic problems."

Mr. Knight does have a little good news for O'Hare. For at least the next five years, it will remain United's single largest hub.

Meanwhile, he has a sharp reply to contentions by city officials that Chicago is a "mature" market in need of little new service: "I couldn't agree with that. This is a viable, growing market."